Finance Bill

House of Commons

Session 2002 - 03
Internet Publications
Other Bills before Parliament

Finance Bill

Finance Bill
Part 4 — Pension schemes etc
Chapter 7 — Compliance
213

(8)
References in this section to the income tax to which a scheme administrator is
liable under this Part do not include any to which the scheme administrator is
liable under section 235 (scheme sanction charge).
(9)
Where the registration of a registered pension scheme has been withdrawn,
this section has effect as if references to the scheme administrator were to the
5
person who was, or each of the persons who were, the scheme administrator
immediately before the registration was withdrawn.
249
Assessments under this Part
(1)
The Board of Inland Revenue may by regulations make provision for and in
connection with the making of assessments in respect of—
10
(a)
the unauthorised payments charge,
(b)
the unauthorised payments surcharge,
(c)
liability to the lifetime allowance charge under section 213(2) (person to
whom lump sum death benefit paid),
(d)
the scheme sanction charge,
15
(e)
liability under section 266 (trustees etc. liable as scheme administrator),
(f)
liability under section 267 (member liable as scheme administrator),
and
(g)
liability under section 394 of ITEPA 2003 (benefit under employer-
financed retirement benefits scheme: charge on responsible person).
20
(2)
The provision that may be made by the regulations includes (in particular)
provision for the charging of interest on tax due under such assessments which
remains unpaid.
(3)
The regulations may, in particular—
(a)
modify the operation of any provision of the Tax Acts, or
25
(b)
provide for the application of any provision of the Tax Acts (with or
without modification).
Registration regulations
250
Enhanced lifetime allowance regulations
(1)
This section applies to regulations made by the Board of Inland Revenue
30
under—
(a)
section 216(5) (lifetime allowance enhancement: registration of pension
credits),
(b)
section 217(6) (lifetime allowance enhancement: individuals who are
not always relevant UK individuals),
35
(c)
section 220(9) (lifetime allowance enhancement: transfers from
recognised overseas pension scheme),
(d)
paragraph 7(1)(b) of Schedule 34 (lifetime allowance enhancement:
“primary protection”),
(e)
paragraph 12(1) of that Schedule (lifetime allowance: “enhanced
40
protection”), and
(f)
paragraph 18(6) of that Schedule (lifetime allowance enhancement: pre-
commencement pension credits).

Finance Bill
Part 4 — Pension schemes etc
Chapter 7 — Compliance
214

(2)
The regulations to which this section applies are referred to in this Part as
“enhanced lifetime allowance regulations”.
(3)
Enhanced lifetime allowance regulations may include any provision that
appears appropriate for securing that the correct tax is charged—
(a)
by way of the lifetime allowance charge in respect of amounts
5
crystallised by benefit crystallisation events, and
(b)
in respect of the payment of lump sums by registered pension schemes.
(4)
Enhanced lifetime allowance regulations may, for that purpose, in particular
contain provision—
(a)
requiring any person to produce or make available documents,
10
produce certificates or provide information, and
(b)
for the review from time to time of any matter registered in accordance
with the regulations.
Penalties
251
Registered pension scheme return
15
(1)
If the scheme administrator of a registered pension scheme fails to comply with
a notice under section 244 (registered pension scheme return), the scheme
administrator is liable to a penalty of £100.
(2)
If the failure continues after a penalty is imposed under subsection (1), the
scheme administrator is liable to a further penalty not exceeding £60 for each
20
day on which the failure continues after the day on which that penalty was
imposed (but excluding any day for which a penalty under this subsection has
already been imposed).
(3)
No penalty may be imposed under subsection (1) or (2) in respect of a failure
after it has been remedied.
25
(4)
If the scheme administrator of a registered pension scheme fraudulently or
negligently—
(a)
makes an incorrect return required by a notice under section 244, or
(b)
delivers any incorrect accounts, statements or other documents with
such a return,
30

the scheme administrator is liable to a penalty not exceeding £3,000.
252
Information required by regulations
(1)
In section 98 of TMA 1970 (penalties for failure to provide information and
providing false information), in the second column of the Table, insert at the
appropriate place—
35

“regulations under section 245(1)(a) or (4) of the

Finance Act 2004;”.

(2)
A person who fails to comply with regulations under section 245(1)(b)
(preservation of documents) is liable to a penalty not exceeding £3,000.

Finance Bill
Part 4 — Pension schemes etc
Chapter 7 — Compliance
215

253
Documents and particulars required by notice
(1)
A person who fails to comply with a notice under section 246 (notice requiring
documents or particulars) is liable to a penalty not exceeding £300.
(2)
If the failure continues after a penalty is imposed under subsection (1), the
person is liable to a further penalty not exceeding £60 for each day on which
5
the failure continues after the day on which that penalty was imposed (but
excluding any day for which a penalty under this subsection has already been
imposed).
(3)
No penalty may be imposed under subsection (1) or (2) in respect of a failure
after it has been remedied.
10
(4)
If a person fraudulently or negligently—
(a)
produces or makes available for inspection any incorrect documents, or
(b)
provides any incorrect particulars,

in response to a notice under section 246, the person is liable to a penalty not
exceeding £3,000.
15
254
Accounting return
(1)
If the scheme administrator of a registered pension scheme fails to make a
return for a quarter in accordance with section 248 (return of tax charged), the
scheme administrator is liable—
(a)
to a penalty or penalties of the relevant quarterly amount for each
20
quarter (or part of a quarter) for which the failure continues, excluding
any quarter after the fourth or for which a penalty under this paragraph
has already been imposed, and
(b)
if the failure continues beyond the fourth quarter (whether or not any
penalty under paragraph (a) is imposed), to a penalty not exceeding the
25
amount of income tax to which the scheme administrator is liable
(otherwise than under section 235: scheme sanction charge) for the
quarter for which the return is not made.
(2)
In subsection (1)—

“quarter” means a period of three months ending with 31st March, 30th
30
June, 30th September or 31st December, and

“the relevant quarterly amount”—
(a)
if the number of persons in respect of whom particulars should
be included in the return by virtue of section 248(4)(b) is ten or
less, is £100, and
35
(b)
if that number is greater than ten, is £100 for each ten such
persons and an additional £100 where that number is not a
multiple of ten.
(3)
The Treasury may from time to time by order amend the amounts specified in
the definition of “the relevant quarterly amount” in subsection (2).
40
(4)
No penalty under subsection (1)(b) may be imposed unless—
(a)
the amount of income tax to which the scheme administrator is liable
(otherwise than under section 235) for the quarter concerned has been
determined by the Inland Revenue, and
(b)
the scheme administrator has been notified of that amount.
45

Finance Bill
Part 4 — Pension schemes etc
Chapter 7 — Compliance
216

(5)
In section 100(6)(a) of TMA 1970 (excessive penalty), after “1998” insert “or
section 254(1)(b) of the Finance Act 2004”.
(6)
If the scheme administrator of a registered pension scheme fraudulently or
negligently makes an incorrect return under section 248, the scheme
administrator is liable to a penalty not exceeding the difference between—
5
(a)
the amount of the tax shown in the return, and
(b)
the amount of the tax which should have been shown in the return,

or, if no tax is shown in the return, the amount of the tax which should have
been shown in the return.
(7)
Where the registration of a registered pension scheme has been withdrawn,
10
this section has effect as if references to the scheme administrator were to the
person who was or the persons who were the scheme administrator
immediately before the registration was withdrawn.
255
Enhanced lifetime allowance regulations: documents and information
(1)
This section applies where an individual fraudulently or negligently—
15
(a)
produces or makes available an incorrect document, or produces an
incorrect certificate, in connection with any matter registered in
accordance with enhanced lifetime allowance regulations, or
(b)
provides false information in connection with any such matter,

and the condition in subsection (2) is met.
20
(2)
The condition is that—
(a)
the amount of the individual’s lifetime allowance at the time which is
relevant for the purposes of this paragraph, or
(b)
the amount of the pension commencement lump sums to which the
individual may be entitled at the time which is relevant for the
25
purposes of this paragraph,

would be greater than it actually is were the document or certificate correct or
the information true.
(3)
The individual is liable to a penalty not exceeding 25% of the relevant excess.
(4)
In a case within paragraph (a) of subsection (2), the relevant excess is the
30
difference between what would be the amount of the individual’s lifetime
allowance at the time which is relevant for the purposes of that paragraph
(were the document or certificate correct or the information true) and
whichever is the higher of—
(a)
the actual amount of the individual’s lifetime allowance at that time,
35
and
(b)
the standard lifetime allowance at that time.
(5)
The time which is relevant for the purposes of paragraph (a) of subsection (2)—
(a)
where a benefit crystallisation event has occurred in relation to the
individual since the document was produced or made available, the
40
certificate produced or the information provided (but before a penalty
under this section is imposed), is the time when the benefit
crystallisation event occurred, and
(b)
otherwise, is the time when the document was produced or made
available, the certificate produced or the information provided.
45

Finance Bill
Part 4 — Pension schemes etc
Chapter 7 — Compliance
217

(6)
In a case within paragraph (b) of subsection (2), the relevant excess is the
difference between—
(a)
what would be the amount of the pension commencement lump sums
to which the individual may be entitled at the time which is relevant for
the purposes of that paragraph (were the document or certificate
5
correct or the information true), and
(b)
the actual amount at that time of the pension commencement lump
sums to which the individual may be entitled.
(7)
The time which is relevant for the purposes of paragraph (b) of subsection (2)
is the time when the document was produced or made available, the certificate
10
produced or the information provided.
256
Enhanced lifetime allowance regulations: failures to comply
An individual who fails—
(a)
to produce or make available any document required to be produced
by enhanced lifetime allowance regulations,
15
(b)
to produce any certificate required to be produced by enhanced lifetime
allowance regulations, or
(c)
to provide any information required to be provided by enhanced
lifetime allowance regulations,
is liable to a penalty not exceeding £3,000.
20
257
Lifetime allowance enhanced protection: benefit accrual
(1)
This section applies where—
(a)
paragraph 12 of Schedule 34 (lifetime allowance charge: enhanced
protection) applies in relation to an individual, and
(b)
relevant benefit accrual occurs in relation to the individual (as to which
25
see paragraph 13 of that Schedule).
(2)
If the individual fails to notify the Inland Revenue of the relevant benefit
accrual within the period of 90 days beginning with the day on which it occurs,
the individual is liable to a penalty not exceeding £3,000.
258
False statements etc
30
(1)
A person who fraudulently or negligently makes a false statement or
representation is liable to a penalty not exceeding £3,000 if, in consequence of
the statement or representation—
(a)
that person or any other person obtains relief from, or repayment of, tax
chargeable under this Part, or
35
(b)
a registered pension scheme makes a payment which is an
unauthorised payment.
(2)
A person who assists in or induces the preparation of any document which the
person knows—
(a)
is incorrect, and
40
(b)
will, or is likely to, cause a registered pension scheme to make an
unauthorised payment,

is liable to a penalty not exceeding £3,000.